In order to carry through the policy of “ Quality First ” , maintain “ Polaris ” credit, supervise and manage quality of “ Polaris ” products, ensure and improve quality of “ Polaris ” products, according to 《 the People's Republic of China Quality Law 》 and relevant provisions of superior departments, provisions for products quality management are as followings:

•  Supervision and Management for Products Quality

According to 《“ Polaris ” Brand Management Methods (Trying) 》 , YANTAI POLARIS STATE-HOLDING CO.,LTD. (called the holding company for short following) assumes the right to supervise and control the quality of the products of the companies that employ “ Polaris ” as their brand name or business firm(called companies for short following). The programming and developing department is responsible for execution of quality control and supervision, it conducts supervision 、 inspection and examination for the companies ' work about product quality. Based on practical needs, the companies commission Polaris quality detection center or other quality inspection institutions to conduct selective examinations for the quality of the products.

•  The companies must ensure the character and quality of the products, build up fine trademark image.

•  The companies must have integral quality guarantee system, strictly 、 uniformly 、 effectively operate:

(1)Set up corresponding mechanism; allocate professional quality control personnel;

(2)Build up perfect quality management regulations, establish position quality standard, define quality liability and inspection measures;

(3)From purchasing materials 、 components entering the factories to finished products leaving the factories, perform whole-course quality control;

(4)Guarantee the quality of products during beginning inspection 、 course inspection 、 final inspection;

(5)Strengthen control for key procedures; carry out "three check system"-self check 、 mutual check 、 professional check;

(6)Establish reasonable quality index, conduct strict examination;

(7)Hold integral inspection report 、 accurate quality datum records and checking result records;

(8)Quality control personnel and operators must have necessary training, only eligible stuff can take on the jobs;

(9)Have corresponding technical conditions for production and quality detection means, guarantee safe 、 civilized 、 standard production.

•  The companies must accept supervising management and examination for the quality of products of companies, provide real objects of the examined products according to demands, and do every task well according to relevant provisions of the holding company.

•  The companies must strengthen management for measuring devices, according to 《 the People's Republic of China Measuring Law 》 and《 Measuring Law Implementation Detailed Rules 》 , as for measuring devices in the range of compulsive inspection, the companies should apply for regular inspection according to related regulations; as for measuring devices in the range of compulsive inspection, the companies should take self-examinations regularly or take them to measuring devices inspection institution.

•  The companies must perform the regulation to report serious quality accidents; companies with one of the following quality problems must make a written report to the assigned leaders of the holding company and the programming and developing department within three days:

•  The products present quality disqualification after being inspected randomly and being checked uniformly by technical supervision department of municipal or above level;

•  The export products prove disqualified after being inspected by commodity inspection department;

•  After the products leave the factory, domestic or foreign customers raise claim 、 rejection of the goods 、 dishonor because of quality problems;

•  The customers make objections or complaints to superior departments or Consumers Association because of serious quality problems;

•  Special type clocks such as parterre clock 、 street clock 、 tower clock that act as advertisement keep bad time or give the wrong time because of quality problems and publicized by public media;

•  The companies that have passed ISO9000 series authentications 、 international security authentication and other authentications are discovered to have serious disqualified programs during the course of authentication reinspection;

•  Metering devices are tested disqualified by higher authorities, violate regulations and are forbidden to use and fined;

•  Quality of products has other serious problems.

•  Supervision and Inspection For the Products

According to relevant state standard 、 industry standard and company standard or the required level of the customers, the holding company conducts regular random inspection and examination for the products of the companies; and conducts random inspection at any time when necessary.

•  Establish Quality-Information Reporting System

The results of random inspection for the products 、 the condition of the quality of products and any significant achievement in quality aspect or serious quality problem must be reported without lost of time.

•  The Settlement of Quality Problems

1.If the quality of products is judged disqualified after state 、 provincial 、 municipal supervision random inspection for quality of the products 、 uniform examination or random inspection for quality of the products organized by the holding company (if the real object of the inspected product can not be presented in time according to the requirements, it is regarded as disqualified product), the chief of the company must notify the whole factory as soon as receiving the report or notice about the inspection result, convene an symposia, check 、 research 、 analyze the problems, make a thorough investigation of quality liability of related employees, check up goods and stock products, disqualified products are forbidden to leave factory, withdraw the products with serious defects that have left the factory.

2.The companies that raise significant quality accident will be criticized in public; if their consequence is serious and influential, they will receive punishment such as warning and fine. The companies should find the reasons rapidly and submit rectifying and reform projects to the holding company; if the quality of products is still disqualified after rectifying and reform and harms the credit of “ Polaris ” brand, the right of the companies to employ “ Polaris ” brand will be canceled. If related companies raise the above problems, the problems are settled according to above methods, and the original applying companies assume related liability, and receive punishment at the same time.
These provisions are brought into effect from January 1, 2003